Industrial Revolution Part II
Capitalism: The good, bad and ugly
Growth of Cities
Labor vs Management
Social Changes and Reforms
Socialism, Scientists,
ECONOMICS 101
Some Aspects of CapitalismCompetition in businessMass production
Assembly line practices Make stuff faster, cheaper, more efficiently Does not require skilled labor
Corporations Businesses you can by stock in More $ invested, bigger company gets, more $ it earns,
which draws in more investors
More Capitalism IdeasLaw of Supply and demand
High demand and Low supply = high prices Low demand and High supply = low prices
Law of Competition Most efficient survive
Laissez Faire is the accepted policy
Economists of the Industrial Revolution – page 510
Adam Smith: advocated laissez- faire economics. “Hands off” No government regulation of business.
Good points? Bad Points?
Economic Theories Adam Smith –”The Wealth of Nations” Laissez Faire Capitalism is GOOD for the
country. “greed is good” – industrialists should not be
restricted from making $. “A free market will produce more goods at lower
prices, making them affordable by everyone”. The basis of Capitalism
More $ = more jobs = better economy = stronger country
More Definitions Monopoly
One person or business owns all means of production, distribution and sales
No competition Can charge whatever they want
Cartels Small groups of businessmen who control the
market on certain goods OPEC – (Organization of Petroleum Exporting
Companies) is a modern example
Last Definition – I promiseBusiness Cycles
Natural rise and fall of businesses`
0
20
40
60
80
100
Economic Theories II Thomas Malthus
First proposed the population bomb idea Humans are like a virus. We multiply faster than food rate,
leading to cycles of disaster Governments trying to help people will just make this worse
David Ricardo Iron Law of Wages
Less people = Higher wages more people having kids More people = lower wages people having fewer kids less people the whole process starting all over again
Urbanization In the mid 1700s, more than half the population
of Britain lived and worked on farms. Between 1750 and 1851, displaced farming
families moved to the cities to work in the new factories.
Urban Living Conditions
Factory owners rushed to build housing
Back to back row houses
Several families often share very small houses
Poor sanitation High disease rates Crime Massive pollution
Housing Conditions
Urban Living Conditions
CITY GENTRY
(Wealthy)
TRADESPEOPLE
(Skilled workers)
LABORERS
(Unskilled workers)
Rutland 52 41 38
Truro 40 33 28
Derby 49 38 21
Manchester 38 20 17
Bethnal Green
45 26 16
Liverpool 35 22 15
Average Age at Death for Different Classes
Rutland – agricultural area in central EnglandTruro – tin mining centerOther locations – major industrial centers
Working Conditions and Wages
Common working day: 12 – 14 hours; 6 days a week.
One short break for lunch Workers were beaten if
they did not perform well. Hot, polluted factory air. Workers risked losing
limbs from the machines. Low wages.
Child Labor Children shifted from
farm work to factory work.
12 – 14 hour days 6 day weeks Lower wages than adults. Began at age 5. Mining work deformed
bodies.
Child Labor As concerns about the
welfare of children rose in mid 1800s, Parliament held investigations into working conditions.
New laws and new labor unions improved conditions.
Government was initially on the side of business owners
WHY?
“Combination Acts” outlaws unions
Reformers Jeremy Bentham: utilitarianism –
“greatest happiness for the greatest number.”
John Stuart Mill: government should help the poor and give the
vote to workers and women.
Robert Owen: Built a factory based on the idea that an
employer could offer decent living and working conditions and still make a profit.
Rise of Unions Working conditions in early – mid 1800s very
poor Child labor, low pay, no time off, get hurt get fired
etc Jeremy Bentham and John Mill call for better
treatment, working conditions, democracy (mid 1800s)
Unions IIUnions of workers allow better
bargaining position Use strikes to threaten owners Gain better pay, shorter hours
Role of Government Govt Steps in and plays its “wildcard”
Factory Act –limits work hours for kids See your book
Mines Act – no females in mines Boys must be at least 13 to work mines
Combination Acts Repealed Unions now legal.
Economic Theories III Socialism
“Tax the Rich to give to the poor.” “From each according to his ability to each according to
his need”
Utopian Socialists Co-op type of businesses.
Workers own the business Live in worker owned and run towns where everyone
works for common good of all – not to make more $.
Marx and Engles Karl Marx & Friedrich Engels
“Communist Manifesto” and “Das Kapital” Life is constant struggle between
HAVES (Bourgeoisie) : Upper class, owners, rich and HAVE NOTS (Proletariat): workers, lower
class, poor, labor According to Marx, total radical societal
transformation is inevitable
Marx and Engels II Steps to a perfect world
1. Begin with capitalism 1. Encourages industry,
innovation etc
2. But it exploits the many for the benefit of the few
1. Leads to poverty and inequality
2. Workers will continue to be exploited until they finally revolt. (may be violent)
Steps to a perfect world cont.3 Workers take over and set up Socialist govt.
Rules with iron hand until people accept the idea of sharing everything
4 Govt eventually withers away as people work for the common good, not for themselves
5 Establishment of a classless society, everyone is equal, all are happy.
The Smurf Commune
One little problem…. IT DOESN’T WORK!!!! If there is no incentive to work (I.e.
making money) then people WON’T work.
This would be a good time to talk about “Animal Farm”
The price of progress:
Much easier life. More “stuff.” More convenience
“Faster, Cheaper, Better”
Massive pollution due to the Industrial Revolution.
“Global Warming?”
Plenty to clean up and fix
Wrap UP
China: 2009Look familiar?
Indus. RevContinues
Today
• New inventions and development of factories
• Rapidly growing industry in the 1800s
• Increased production and higher demand for raw materials
• Growth of worldwide trade
• Population explosion and a large labor force
• Exploitation of mineral resources
• Highly developed banking and investment system
• Advances in transportation, agriculture, and communication
Economic Effects
• Child labor laws to end abuses
• Reformers urging equal distribution of wealth (i.e. Karl Marx)
• Trade unions
• Social reform movements, such as utilitarianism, utopianism, socialism, and Marxism
• Reform bills in Parliament
Political Effects
The Industrial Revolution
• Long hours worked by children in factories
• Increase in population of cities
• Poor city planning • Loss of family
stability • Expansion of middle
class• Harsh conditions for
laborers• Workers’ progress
vs. laissez-faire economic attitudes
• Improved standard of living
• Creation of new jobs• Encouragement of
technological progress
Social Effects